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tv   Closing Bell  CNBC  November 5, 2019 3:00pm-5:00pm EST

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>> but it also doesn't run like that anymore >> it runs with a pos! let's keep track of stuff. >> right >> hey, melissa. >> hey, contessa >> if life gives you limonas, you make it limonas lemonade >> that's right! >> thank you, marcus we, for joining us on "power lunch." thanks for watching. >> don't forget "the profit," tonight. welcome to the "closing bell." i'm morgan brennan in for sara eisen at the boeing post that stock is up 2.5%. you'll hear more from the company's chairman on his defense of boeing and its ceo in just a moment. as for the broader market, we're hanging on to record highs here for the dow, at least, with just 59 minutes left to go. >> i don't like the music, morgan, we're going clubbing i'm brian sullivan in for wilfred today. let's take a look pat what is driving the overall action and those new numbers, like morgan just talked to you about you have reports out there that the china and the u.s. are nearing a deal on lifting
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certain tariffs. not just a trade deal, but actually removing some of the economi existing tariffs earnings continue to lead us higher just a bit. we have names like kroger and tapestry, the old coach beating expectations joining us for the entire hour is a man you know well, steven weiss from short hills capital partners steven, good to see you down here at the new york stock exchange >> good to see you brian >> good to see us both here's the thing, earnings, trade, maybe just general positive market sentiment. one of those three or maybe something else, that has been the primary driver for what has been a nice little run we are up nine of the past eleven sessions on the s&p 500 >> i think there are multiple drivers to the market. trade being the most important and the most dominant. you can see the correlation. for those who say that trade is all in the market, that's clearly not true because when you get positive news coming out, the market ticks up when you get negative news, it goes down. so trade is still going to be with us until they sign the agreement. and negotiations are going to continue up until the signing.
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however, what's also lifting the market is we've seen a backup in yields of about 32 bips in the ten-year over the last month the market is associating that with -- >> people selling bonds, buying stocks >> well, more so than that -- i don't know if they're doing that, but they're associating the move or the steepening of the curve and the backup in rates with a healthier economy so they're basically picking different numbers. so we have a strong employment number, we have a poor ism manufacturing number we have a strong ism services, which is most of the economy so you can pick what you want. the markets are always optimistic or 90% of the time, 85% of the time. it's going up. it makes somebody like me almost feel smart because things that i own are working, but i know it's not me, it's the rising tide lifting all ships. >> but it is you, because your boat is on that ocean. some people are still docked >> i was smart enough to get my boat in the water, right
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>> reporte >> but where i am feeling a little pain is my properties i don't think it's anything to worry about or sell, because the fundamentals are still excellent there. >> we'll be talking to you a lot more over the next hour. in the meantime, let's focus on the big stories we are following today. phil lebeau is watching boeing leading the dow following new comments from the company's chairman wilfred frost is in london with exclusive highlights from his interview with jamie dimon and bertha coombs has details on a big pop for walgreens. but first, let's go to you, phil, on boeing. >> and morgan, this was an emphatic defense of dennis muilenburg as ceo of the company, and it came from the chairman of boeing who has only been in that job for basically about a month. dave calhoun talked with us exclusively this morning on "squawk box. we touched on a number of topics including boeing, dennis muilenburg, the future of the 737 max. here's a little taste of what he
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had to say about how the board feels about the job dennis muilenburg has done. >> dennis didn't create this problem. but from the beginning, he knew that mcas should and could be done better. it was sort of clear to us, no one was hiding anything. it was a set of engineering decisions that ended up being wrong. that question of culture and anybody's willingness to trade safety against anything else, never seen it, never touched it, don't believe it >> the big piece of news coming out of this interview this morning is dave calhoun saying that he got a call on saturday from dennis muilenburg who, remember, last week, was grilled on capitol hill about his pay package and why he is still being paid, despite all of the issues surrounding the max mullenberg said, i'm going to waive my bonus and stock awards for 2019 and for as long as it takes to catch up on 737 max deliveries guys, last year, dennis muilenburg made just over $23
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million, so he's not going to have that kind of a payday for '19, likely for all of '20 because they're not going to be caught up until '21, late '20 at the earliest >> great interview you covered quite a number of topics this morning, phil. one of the things that got my attention was the fact that he basically said, we're not going to rebrand name or rename 737 max when it gets back into service. >> it will take pilots and crews getting on these planes once it's recertified the more that happens, if there are no other incidents, most believe in the airline industry that this is going to be something that people are not thinking about a year, year and a half from now. it's definitely going to take a long time. there will be people who are nervous at first, but that's what it's going to take to get this plane back in the comfort zone in terms of the flying public >> i ran a little twitter poll, and about half the people said they will never get on a max again. that's just them being reactionary. i get that but what happens if we have a scenario, phil, where some
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people are looking at flights and listen, if you love in dallas and you're on american yo, you live in new jersey and your only options are a max, you choose a different carrier if that starts to happen, could we see a big carrier pushback on boeing, saying, guys, no one's getting on these planes. you need to take them back and give us a credit or give us our money back >> i think what you're getting at is the rollout of these planes it's not like the faa is going to say, let's say december 28th, the faa says, it's good to go. it's not like everybody is going to say, boom, put them back in the air on january 10th. it will be a slow rollout. >> phil lebeau will be on that first commercial flight when the max goes back into service are you not? i bet. >> absolutely! >> and there are going to be a series of these flights with the ceos, executives, boeing executives they'll have to do this a number of times it won't just be one and then they'll be like, everything's good to go, it's going to take a concerted effort >> let me give you a common sense way to look at it rather than the twitter way, which is
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that all eyes are on this. it's going to be the safest plane out there because they want to make sure that nothing goes wrong if anything goes wrong, it's the future of not only muilenburg but also -- >> let me give you a common sense way about pilots, which is that some pilots we've talked to complain about the engines being moved up and too close to the fuselage what do you do about that? >> when they stop building planes and i stop getting secondhand information with the plane in the air, because every roguetory authority in the world that's looking at this with the finest microscope you have on hand is going to say, it's safe or it's not. can you imagine what would happen if this plane has another issue? i respect what you've heard from the pilots i'm just going the other way on it >> i'll get on it with phil. >> believe me, i have already made it clear to my family, i'm going to be on a lot of these flights. and that's fine. once it's settcertified, i'm hay to go -- >> you, me, and weiss. >> i've actually had some people suggest i take it, which troubles me a little bit
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>> good stuff. >> we're not done talking about this but moving on. on to another big exclusive interview today, mr. wilfred frost sitting down with mr. jpmorg jpmorgan they were in london and talked about a bunch of things among them wework. here's what dimon had to say when asked if jpmorgan had misled wework and its former ceo adam neumann in terms of the valuation that the company could achieve. >> you don't know the private advice we gave him or the company. and when it became a problem, jpmorgan did what it always did. in fact, we got a letter saying, no, you exactly what jpmorgan does when a client has a problem. you rolled up your sleeves and tried to find a solution at the end of the day, we did. we offered them a bought, fully financed kind of deal that can get them to the next stage of the life and i think they'll have a future life. and we want them to do that. we don't want to have to lay off 14,000 people with bankruptcy or something like that.
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but a lot of lessons to be learned by everybody along the way and i have learned a few myself >> what have you learned, in particular >> some we knew before, but i think companies going public should have proper corporate governance before they file an s1 you have to make sure you take a lot of time to go through how you disclose this stuff to the public and be responsible shareholders. shareholders should be treated like partners. they shouldn't be treated like, what's the highest price can i get? the investment bank can guide on price, but at the end of the day, price discoveries, when you get hundreds of people in a room like this, and smart people with different ways of analyzing things, its growth prospects and that is real price discovery. and the bank should help guide that, but just because someone says it's something different, that does not make that true >> so do you pledge here and now that you won't put your company's name on another s1 with that level of corporate governance questions >> i would never make a pledge
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to you or anybody else like that i don't make pledges do the best i can every time can i. >> but you said it should have had better -- all male board directors, you talked to yourself about that not being the case at jpmorgan the founder owned buildings where the company was a tenant they had multiple-person loans against their own -- >> so a lot of those things were prior. some were changed going forward. if i remember correctly, they had promised to put a female board member they had just gone -- >> but the first s1. >> but you don't know everything that happened on the first s1. >> is that something you don't want to put jpmorgan's name on the s1 >> i would never tell you something like that. we'll decide on every specific case and if we don't want to do business with a client, we can give them advice and we will not do business. but i'm not going to go through the detail wlas what we did in this particular one.
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i do think we helped wework get to a proper conclusion, which i think is very important. my really uh would have been bothered and upset if that company was a failure and had a chance to succeed and now it has a chance to succeed. >> that's just part of the interview. and wifflered joining us now from london. it was a great interview, a lot covered. you talked about brexit, that, wework what stuck out the most to you >> reporter: listen, i think the wework discussion clearly relatively heated, but with dimon admitting that there were lessons learned and mistakes made some other interesting highlights of the interview of what we've played so far, he says he doesn't think companies should be criticized for making profits in china he thinks the u.s. economy, 77% of it, the consumer was strong, but still supported the three fed rate cuts we've seen this year and said despite a couple of recent hiccups from the fed, whether that was the repo rate or otherwise, he still thinks they're incredibly powerful and
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in control and on buybacks, even though they've been buying so much stock a they're not ideal and he would much rather be investing that cash in the business going forward, but didn't seem to say that the share price itself and the two times tangible book value they trade at was a hurdle to further book values going forward. and i would say a pretty clear hint on the trouble of secession planning that the next ceo could be a woman, which bodes well for mary ann lake and jen peepsack >> wide-ranging interview. just to go back to the wework piece of this interview a little more, we kind of can't stress enough how much jpmorgan has been involved with this company, as an investor, in terms of underwriting the ipo that got scrapped in terms of extending personal loans to adam neumann, as well what was the thing that stood out the most in your discussion with jamie dimon about that entire dynamic >> i think there's two themes that both david solomon of
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goldman sachs when i interviewed him a couple of weeks ago and jamie dimon today seemed to echo, which are fair which they sort of say, look, the ipo process kind of worked, ultimately it just played out in public that's true, albeit, perhaps, a slightly generous framing of events they also are loyal to their client they're happy that ultimately the client's life will continue. and they don't want to reveal individual advice that they may have been given that client privately, that may not have been listened to we don't know about those details. but what fundamentally is very difficult for them to hide from, two big ceos that often talk about the importance of corporate governance is that they put their names on the s1 with a litany of terrible corporate governance practices i think jamie dimon acknowledged today that that was a mistake, that he's learned a lesson from it he wouldn't go as far as to say he'll pledge never to do it again. he says he has to reserve that judgment for individual cases as they arise but i would say that was a
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pretty full mea culpa. not perhaps 100% of the way, weapon didn't get that forward-looking pledge, but a pretty clear acknowledgement of mistakes made in the past. >> so, wilf, what's coming up in the next hour with jamie dimon >> reporter: yeah, so we picked up on more of the public policy topics and exclusive portions still to air just here on "closing bell" in the next hour. so we discussed that business roundtable statement elizabeth warren's response to that and jamie dimon had some pretty tough words to say about some of the things she's been articulating other kinds of things he aligns with in terms of perhaps paying more tax himself and ended with a question about whether there could ever be the possibility of public service for him in the future. quite an interesting answer on that well worth tuning in, of course, for the extra portion of that interview coming up next hour. >> we'll see a lot more of you in the coming hour and a half or i guess hour and 45 minutes, i should say
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wilf, we're look forward to it, thank you. >> they should stay tuned for other reasons, also. >> you mean, you and me and stephen. >> stephen weiss, morgan brennan. >> it's an all-star panel, basically. >> exactly >> all right >> can i talk about wework for one second there seems to be a tendency to blame the biggest pocketbook in the world whereas we're talking about investors that bought into that $46 billion valuation ya i can't tell you how much pitch meetings i've been in where we came in at the high end, at the middle end ultimately, it's up to the board, the private equity investors, and up to the ceo you can't blame jpmorgan >> does wework survive >> sorry >> does swooiit survive >> that's a great question i don't know the answer to it. without softbank and they're inflating all this private equity, they're probably the biggest culprit in silicon valley who knows? >> well, taking a look at
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walgreens, we see shares of that company climbing higher on a report that it has explored a deal to go private bertha coombs joins us with the latest bertha >> morgan, walgreens is weighing a potential buyout a source familiar with the situation telling cnbc that the company was approached by private equity firms about a potential deal and now the board has approached investment bank evercorps to explore a sale shares spiking on an initial report of the news, but walgreens has struggled. the company has tried to cut costs, but the market cap north of $55 billion, it could amount to a massive leverage buy out. any deal, though, would hinge on on ceo stefano pessina okaying it >> that is a big story that would be a big-time buyout, bertha coombs. thank you very much. wow. all right, on deck, call it
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kicking them when they're down goldman sachs booting under armour from its high conviction list, and it isn't the first miss from the bank's list of favorite stocks. we'll take a closer look at some of the misses and some of the hits and later, an exclusive interview with melodee hobson. driverless cars, or trips to mars. no commission. delivery drones, or the latest phones. no commission. no matter what you trade, at fidelity you'll pay no commission for online u.s. equity trades. at fidelity you'll pay no commission what do advisors look for don't just track an index, help me meet a client's need. is the fund built to sell or built to last? etfs are only part of a portfolio. so make it easy to explain. give me a quality fund that helps me get clients closer to their goals. flexshares etfs are designed and managed around investor objectives.
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welcome back 3:19 here on the east. it is time for word on the street and the word is meat bernstein upgrading beyond meat to an outperform the risk reward on the equity is more balanced. shares have gone from 148 near october to near 80 now the key question is whether mcdonald's will do any kind of a national rollout of a beyond meat border. in the meantime, wither them all. a new ubs survey shows for the sixth straight year, shoppers are visiting malls less often and those polled who do say they still go to the mall, apparently just go to eat or hang out
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and ubs says that global brands like skechers and pvh have a better chance of dealing with the changing environment compared to retail stores. >> i totally go to the mall to eat. just saying. and goldman sachs removing under armour from america's conviction buy list. the firm cites increasingly c p choppy results this follows its remove of grubhub after that stock fell more than 40% after disappointing third quarter earnings the best-performs stocks are actually amazon, paypal, and bank of america. so while the worst-performing stocks since being added to the list are pioneer natural resources, biomarrin >> there's a point stephen weiss, i'm not knocking on goldman. some of these names like pioneer and marathon are trading as if oil is going to zero not quite, but close valuations at all-time lows.
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i will at least give goldman credit for sticking their neck out a little bit on the energy space. >> i've never been -- i used to invest in energy, and i haven't done it. i've seen some of the smartest, biggest names go belly up investing in the space and whether it's a ceo or andy hall, the big energy trader, couldn't put up the numbers there's too much speculation and too much going on there for me to get involved. but if you go back to under armour, i don't know why i was ever on their conviction list. when you look at their numbers -- >> they had fast growth for years. >> years ago so they've been having declining earnings, declining revenues, losing market share. when i've got companies that are cheaper and meaningfully cheaper, materially cheaper, such as nike and lululemon that continue to gor grow and do the right thing.
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if it doesn't, i'll never look it >> shares are up 5%, bouncing back a little bit after that steep fall yesterday uber, meantime, is falling to its lowest level ever, also, an exclusive interview with mellody hobson. she'll tell us where she's finding value in the market right now. a rera interview with mellody. stocks now at record highs you'll hear from mellody, coming up it was sophie's big day. by the way, she's the next mozart. as usual we were behind schedule.
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welcome back let's get back to wilfred frost in london who spoke earlier today with mellody hobson. wilf >> hey, brian. i did, indeed. in fact, her first business tv interview since being named co-ceo of ariel investments this year in july and i began by asking her what she felt about these record market highs we've been seeing, despite a number of significant headwinds that remain. >> i think what we would say is that the fundamentals have been very strong and that's what we're seeing in the markets. the markets are showing us that the underlying strength of the u.s. economy, especially, does warrant this performance and we've been saying that for a
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long time. it feels as if we've been trying to wish ourselves into a bad market, just because it's gone on for so long >> u.s. equities then the best place to be? >> it has been, clearly. going forward, i'm a value investor so when you've had a run like this, you're always thinking, where in the world can you find value and clearly there are other parts of the world that haven't done as well but even in the u.s., which has done so well, there's always value to be had, especially in this market, where it tends to be a shoot first, ask questions later kind of environment. so even with the run we've had, we've had stocks trade down hard sometimes. and that creates a real value opportunity. >> duo you think now is an increasingly important time to be investing in an active way rather than passive way, given some of the nuances in the marketplace at the moment? >> certainly, i'm an active investor and i believe in active investing. we've been doing that at ariel for 36 years now and there's data that shows that especially in certain pockets of the market, you can outperform the market small cap, international, all
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sorts of areas of the market, over the long-term lately, there's no question, passive has been the winner. but it is a crowded trade. and the risks there really do worry us, when you look at all of the people that have piled into passive, how massive the passive investment management companies have become. i think of them as the amazons of investing now they're giant and cheap. and i think that has created a self-fulfilling prophesy in terms of the investors piling in and when that starts to unwind, i'm very, very worried about the risks that are there >> you mentioned, it's been cheaper to be a passive investor we've also seen a price war start to take place in the direct brokers, cutting trades to the cost of zero. does that mean ariel will have to cut their fees quite soon >> this is what i think. you get what you pay for and i think we're worth the money that we ask investors to pay. we are truly bottom up active investors and we're out there every day hunting for new ideas. and that costs money i think that to try to play this
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relative game against passive, they are fundamental lip different things in the example they give people, you could buy a jaguar or a yugo, they're both cars, i'm not sure that yugos still exist, but they're fundamentally different. when it comes to active invest prg us, we feel very good about our fees here. >> as i mentioned, recently been named co-ceo of ariel. one of the few african-american women to lead a big financial company. you also have been on the board of jpmorgan, which was 18 months ago and the first african-american woman to join that how many obstacles have you faced in that climb in the world of finance >> how long do you have? >> plenty of time. it's an important topic. >> no, it's been, you know, listen, i'm not a victim i try to be a victor and i don't walk around carrying that cross. but clearly, there has been a lot to overcome. especially being a woman and a person of color. we call it double jeopardy
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and, you know, you have to decide how you're going to show up in life i've used some of my differences as a way to stand out and to hopefully count and matter and hope flip create an opportunity for others to come behind me by doing a good job and hopefully being excellent. >> what advice do you have to your younger self, starting out in finance >> well, first of all, i would say, don't worry so much i spend a lot of time worrying about how to be good just do the work i did do the work. i had my head down, but i was always fretting and hand wringing and that doesn't get you very far and the other thing i would say to my younger self, and i do believe this, you have to be very confident in your own ideas opini and be willing to be brave and take rusks i tell young people that all the time be brave bravery is not the absence of fear, it's overcoming it >> there's a big debate in the political world. on our air just yesterday, leon cooperman was on, that certain politicians want to see wealthy
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people pay more taxes. and certain wealthy people feel they're deserving of the success that they have earned themselves where do you stand in that debate >> i guess i stand somewhere in the middle i think that i know a lot of people who have done extraordinarily well and i think they've worked very hard for their success and they deserve it at the same time, if i look at the u.s. tax system as it relates to individuals, warren buffett has been the one that's talked about this very eloquently it doesn't make sense that he has a higher marginal tax rate than his assistant so i think i feel more in his camp that those who can pay more should but i don't think that you should be penalizing people for success. i think that's the wrong signal to send. i think that's the opposite of everything that america has stood for. >> jamie dimon, of course, chairman of the board you sit on here at jpmorgan said that the american dream is alive but fraying. do you agree with that and can it be saved in the near future >> i would say personally, i'm an example of the american
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dream. i grew up the youngest of six kids my mom was a single mom. we had a lot to overcome financially when i was a child so i'm a testament and i went from that to go to princeton and sitting on the board of jpmorgan miraculous happen. i worked really hard for those opportunities, but the stars had to align as well to create those opportunities for me i believe the american dream is alive. however, i do believe and i've said this, capitalism has to work for everyone. and it isn't working as well for people of color and women in our society as i think it should >> you mentioned some of the struggles you had growing up how much was financial literacy one of them? >> if you ask parents in the u.s. about where their comfort is in talking to their kids
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about sex and drugs over money and comes out of our money fears as well as the that many of us don't go to schools where money is taught or investing is taught and we're behind the eight ball. having a financially illiterate society is dangerous and we have to do something about that we need financial literacy in schools all over the world, not just america >> so what you're saying is people should watch cnbc more. >> i think cnbc, but i would like to see it in classrooms and great textbooks, great opportunities for kids to really understand the stock market investing. because at the end of the day, they are going to be all they have in terms of creating a life for themselves, a retirement account, and things like that and passing on wealth. it's going to be hard to do that unless someone teaches us. >> once you became financially comfortable yourself, do you remember the first sort of treat you allowed yourself, the first big purchase >> well, i remember, my slogan in 1996 was, i was getting a couch.
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that was like a big deal is a couch in '96. bau because i lived in an apartment, i graduated from college in 1991 and i didn't have furniture for years. and i didn't understand how people bought furniture, because it seemed so expensive my first big thing was i got to a sofa i used to leave my office in the middle of the day to just go and look at it >> do you still have it? >> i do not. i gave it to my niece. but it was a good sofa >> sounds like it, as well and obviously close to your heart. before we run out of time, i wanted to pivot, if i may, to media. of course, another area of your expertise. do you feel like things are oversaturated at the moment when you look at the sort of streaming market, with various new entrants that launched just last week? >> certainly, a lot is coming online i'm on the board of quiby and we're launching in april but i think at the end of the day, i believe that content is king it's always going to be about what are people producing, what are they offering up for the
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sm customer, and if they have good content, people will come and buy it we've seen this golden age of television and media in so many ways, at the same time that we've had this consolidation i'm excited about what's coming. >> mellody hobson there, of course, on so many boards from quiby to starbucks to jpmorgan as well as being co-ceo as ariel investments. a very wide-ranging conversation with her still to come, guys, of course, more from jamie dimon, particularly on policy and politics in the next hour. back to you! >> great stuff, wilf we're looking forward to the rest we've got 25 minutes left to go. it is a mixed picture for stocks the s&p is down slightly, but we are poised for record closes for both the dow and the nasdaq. here are there three things driving the action reports that china and the u.s. are nearing a deal on lifting the tariffs, earnings continue to lead us higher with names from kroger to tapestry beating expectations and reports just this afternoon that walgreens is exploring going private.
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that stock leading the dow further into record territory. all right. time now for a cnbc news update. let's find out what else is happening outside the world of money and business sue herrera, what's going on >> we have a lot going on. here's what's happening at this hour, everyone jury selection in the roger stone trial hitting a snag a member of the public observing the proceedings had a medical emergency. the courtroom had to be cleared as medics attended to the man to have pooeappeared to have had a seizure. the man is expected to be okay the florida sheriff's deputy is in custody and charged with child abuse after he was caught slamming a student to the ground the incident, as you can see, was captured on camera in september. willard miller was working as a resource officer when he grabbed a 15-year-old girl, slammed her to the ground, before then placing her in handcuffs a record narcotics seizure in georgia u.s. customs and border protection officials showing off a portion of the 2,133 pounds
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seized of cocaine. it was discovered in a vessel that came into the savannah sea port marked as containing scrap metal. and a new fda study shows more than one in four high school students and 10% of middle school students use e-cigarettes more than half of these teens say juul is their brand of choice a second study from the university of southern california found mint and mango, the most popular juul flavors among youth. you are up to date that's the news update this hour, guys i'll send it back downtown to you. >> i don't know how old your teens are, sue, but vaping is everywhere >> it is everywhere. mine do not vape, but they do say a number of their friends do don't even get me started. just don't get me started. >> and you've got these guys that go into the convenience stores buy like 50 pods and you know -- anyway >> we'll talk further. >> exactly all right, coming up, your last chance trade, not ever, but
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today with stephen weiss >> and yields on the rise again today with the ten-year back above 1.8% "closing bell" will be right back ♪
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to perspective employees. we found the best person to find the best person for us. post a job today at welcome back to "closing bell." energy is one of the top-performing sectors today brian is over at the telestrator with more on the moves brian? >> all right thank you very much, morgan. so bob pisani has talked about this a lot, right? we've had a decent run for oil and gas stocks lately, especially among the more high debt, highly levered and highly shorted names. these are some of the better performers you have laredo petroleum, the best of all the mid-sized companies. there are some that are up more, but microcaps now, super heavy debt load. continental, a name we know, up 11%. and even hess, it's not just the mid-sized guys, some of the larger players like hess, up 11%
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in just 30 days. now let's get a check on a couple of big funds that mirror oil and gas. one is a rather aggressive bet on the space but let's start with this one first. it is the vaneck oil etf, the oih. not ohio state, the oih. it is up nearly 10% in a month it's been kind of a slow climb, but it's done well its biggest holdings, schlumberger, halliburton, and bakers hughes. okay but for those -- and i'm not advising it, but whoever wants to get really aggressive in the space, there's the direction, three times bull, oil and gas ticker you've got to love it, it's gush you get it all right. refiners are the top component of this etf. but just remember, guys, this is three times levered. so you better be very convicted that oil prices will continue to move higher if you're going to get into gush. morgan >> all right thanks, brian. at the telestrator >> sure.
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we have got less than 18 minutes before the bell. any close higher on the dow, s&p, or nasdaq would be a record up next, we've got your last-chance trade. and tomorrow, join cnbc at the deal book conference a great lineup of guests including dennis muilenburg, kim kardashian-west, bill gaetz and more you can catch it starting at 8:30 a.m. right here on cnbc [leaf blower] you should be mad at leaf blowers. [beep] you should be mad your neighbor always wants to hang out. and you should be mad your smart fridge is unnecessarily complicated. but you're not mad, because you have e*trade which isn't complicated.
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♪ what would you like the power to do? ♪ welcome back to "closing bell." we've got 14 minutes left to go. the s&p is hugging the flat line, 3078 the dow is up 68 points. steve, what is your last chance trade? >> alibaba i started buying the stock a couple of weeks ago. the reason being is that they're going to -- they're going to list in hong kong. there's a huge appetite for, if you take a look at the disparity between the way stocks are valued over there in the "a" shares market in hong kong, significant premium to the
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valuation here because of the scarcity that as well, so the stock hasn't done much, hasn't moved, for example, with the stocks here on china news i think it's a pretty good trade. and they just reported a tremendous quarter to me, i can see 200, next stop, near-term -- >> are you comfortable with the clarity of their accounting, steven >> i'm not comfortable with the clarity of their accounting, but we've got under armour, it's a u.s. company are you comfortable with the clarity of their accounting? you know what you're getting there. it's opaque, they are all variable interest intent 'tenti. just trade here on the economic interest that's just a fact i'm not happy with the accounting on any of those companies over there >> all right >> thank you >> last chance trade, baba >> it is >> all right so, happy tuesday. once again, we are on record closing watch for the big three indexes. and as always, this right now, that's coming up, is the last commercial break before we take you into the close and well past it it is called market zone and it
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♪ ♪ ♪ ♪ don't get mad. get e*trade, dawg. all right. welcome back just about eight and a half minutes to go and we are now in the "closing bell" market zone >> commercial-free coverage of all the action going on into the close. >> today, we've got steve weiss from short hills capital and chris retsler from needham here to break down today's top stories.
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financial stocks are leading today. our own wilfred frost sat down with jpmorgan jamie dimon earlier to discuss the stock's own buyback plan >> i think even more important, i would rather use our capital to grow our business and the constraints on that are a multitude about how you can use capital in a bank. but if i had my druthers, i wouldn't do any buybacks at all. any had my complete, i wouldn't even have a dividend >> we'll have much more from dimon including his thoughts on taxing the wealthy, that's coming up. but meantime, in terms of the interview and some of the comments we have heard from jamie dimon so far, what's your takeaway >> my takeaway is that they are the leader in the financials i'm not into financials. i missed the train i own visa, but of course that's down today so i'm staying on the sidelines. rates are supposed to go to zero or below what happened here going torhe other i think they're a little stnded so i'm not buying financials >> you probably don't want to touch this, but i know that wilf asked these questions, they're
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politically sensitive. ceos aren't going to probably give the answer they might give behind closed doors. let's be clear the ceo of peloton on cnbc said earlier today they were thinking about buying an ad in the super bowl, but they didn't think it was appropriate in this climate. i thought he meant, i'm afraid to advertise an expensive bike in this environment. do you think that ceos are going to really have a tough time walking this line the next couple of months >> i don't think they should i think it's a shame they have to think that way, frankly >> they've walked that line. someone came on this show, not this show, but on cnbc and said, i haven't heard much about ceos talking about tariffs. of course you haven't. they're not going to say it. they're not going to say it and risk the wrath doesn't mean it's not reality. >> we're poised for record closes for both the dow and the nasdaq how much are buybacks a piece of the pulzzle
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>> i think they are a big piece of the puzzle over the last few years, but there are periods in earnings seasons when they're blackout periods and that's where we actually find opportunities as active managers to buy some stock but as we come out of earnings season, i would expect companies to revamp and come back to those buybacks and probably give a strong end of the year with regards to that buying >> sit tight here. i want to go to deirdre bosa with more on how uber is closing after their quarterly loss it is not a pretty picture >> it is not, brian. uber is about to close out one of its who's days as a public company. it's nearly down nearly 40% from its $45 ipo price. this comes on the heels of company finally actually giving investors what they've been asking for a timeline to profitability. ceo dara khosrowshahi said they'd reach total company ebitda profitability by 2021, but gave very little detail as to how they'd actually get
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there. the earnings call was painful. analyst after analyst asked for more detail and finally uber said they don't want to get stuck on it and it's something they're still working through. back to you. >> deirdre, thank you. chris, i mean, you talk about uber, fresh record lows in trading today, but quite a number of these companies that have ipo'd this year and have also recently reported earnings or the lack of earnings are trading below their ipo prices what does that tell us >> i think we just got done with tax selling loss season for mutual funds, so there's a lot of pressure out there. but i also think kind of this time of the yore, you do lose some institutional sponsorship at some of these larger holdings so if they don't have a full position, better off to exit and maybe come back to it. i don't think that the story is completely lost. >> sis there a bull case here? facebook was a disaster right after its ipo, too >> different >> why >> because you can see, they laid out a plan -- we're going to pick up mobile advertising, they did, okay
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they didn't come out with terms that are similar to alternate fact in saying ebitda profitability. what is that it's either positive or not? you could be losing money and have ebitda. >> peloton stock sinking after reporting another loss today, but this was its first ever quarter as a public company. ceo john foley appearing on "squawk on the street" earlier and he talked about peloton's paft path to profitability. >> in a climate that people want profitability, we are, for us, profit sbability is a managed outcome. we could pull back on growth and become profitable tomorrow our core u.s. bike business is profitable the investments we're making in international, in digital, in new products, in new content, they're all smart investments, we're very excited about them. but even in the face of all of those investments, we have narrowing losses >> chris, does this go back to the conversation we were just
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having >> it's also a show-me story i think it's a great product and a great offering and service, but i think over time, they need to prove it. and i don't think the decision is in this to where this goes long-term. >> and look at the echelon bike, it looks exactly the same and it's cheaper and the monthly subscription is cheaper. it's made in tennessee >> you can't go down a path if you're stationary. >> we'll need one of those bikes for the next name we're going to talk about, shake shack. down double digits today >> shares of share shaq falling more than 20% after seeing its exclusive partnership with grubhub that starts in q4 could negatively impact margins into 2020 on the earnings call last night, ceo randy garutti said, as we remove direct point of sale integrations with door dash, postmates and caviar, we expect an impact on our delivery revenue, especially in those regions where grub may not be the current market leader. shake shack will remove those other services by year end grubhub is the market leader, or in second place, in 5 out of the top 12 largest markets
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shares of grubhub are up 2% today. >> we have got over two minutes left to go let's send it now to rick santelli to get a check on bonds and bonds have been selling off a bit. yields backing up a little bit >> absolutely. it's not only here, it's around the globe. remember, global interest rates went down together now they're coming up together let's look at july 1st start on several sovereigns let's start with the u.s this is going to be the second highest yield close since the end of july. look at the eurozone highest yield close since mid-july look at the uk guild highest yield close since mid-july look at the canadian tenure. highest close almost since mid-july and bertha, at the nasdaq, three days in a row of record closes >> yeah, they are thanks to tech, but i want to look at what the big movers that we're seeing today, and they're in health care you've got the good in reengij n regeneron, then you've got the
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ugly mylon. as it looks out to 2020, analysts are not so sure that its acquisition will result in growth it's downgraded to a sell. and you've got the ugly duckling, walgreens looking like a swan this afternoon on reports that it is considering a sale to private equity a source tells cnbc that the p\ firms approached the firm, bob it has so much debt, it really needs to do something to compete with rivals like cvs right now >> and they've got to compete against walmart and some other people that are out there, including amazon a lot of money they need to spend and the street, you know, not very forgiving of that, bertha we've got, let's call ate consolidation day. that's what's going on about even on the advanced decline line we're looking for new breakouts, new sector breakouts we're not really getting that today, unfortunately we've said, the old leadership group is still there it's been there for a while now, that is financials and industrials. regional banks, again, all new
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highs. the other group that's breaking out, still has been breaking out, is those industrial names honeywell, caterpillar, a lot o optimism on trade talk built into those and some infrastructure stocks like jacobs engineering, new highs. there's the closing bell the dow was at new highs about an hour ago. still up 32 points s&p 500 closing flat for the day. all right. and welcome to the "closing bell," everybody on another record tuesday, i'm brian sullivan >> and i'm morgan brennan in for sara eisen let's get a look at how the markets have settled here. looks like the dow has finished another record closing high, up 31 points, 27492 the s&p taking a breather from its recent record rally, closing down about three points. the nasdaq looks like it closed
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at a fresh record high small caps finishing the day higher and transports hitting a fresh 52-week high >> and steven weiss, you've got a kid that went to duke and a bunch of j-hawks surrounding us. let's go blue devils stephen weiss. chris retsler are still with us, as well. i think it's the ninth day of 11, stephen, that we are higher on the s&p 500 a lot of momentum behind this market right now >> and for good reason where are you going to put your money, even though we backed up in rates you have all the positive news momentum you have earnings out of the way. positive on the trade front. so look, i think that people are maybe putting too much stock in the fact that the global economy is churning. i don't see any signs of that. but at least it's not declining. that's enough to keep stocks going. >> and we have jim keenan with
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black rock with us today, as well jim, your thoughts on these recent record runs we've seen for the major averages >> i think you're seeing a bit of the reflation tradecoming back in. i think the estimates of the probability of recession next year got too high towards the end of the summer. you're starting to see a little bit of ease on that, as you see some expectations of some deal with china, but you've also seen decent earnings come in well above expectations and the market is starting to rebound. we don't necessarily see growth, but we see stability in the economic data. >> the relationship, jim, between interest rates and equities, the fact that we did see treasury rates, treasury yields, i should say rise today, do you continue to watch that relationship closely >> i think you should watch it closely, but i wouldn't look at today or even the last month as
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a negative today, everyone was a little bit fearful of that potential recession. and now that the market is looking at the earnings data and the chinese data and you're seeing a rebound rates going from 1.5 to 2% is not necessarily a negative that's not going to take the wind out of the sales of the recovery here and i think you could continue to see a grind up into equities until year end >> jim keenan, notre dame guy, so i can't ask him a question after last weekend's football game everything in the world is up. u.s. bonds, u.s. stocks, developed markets. japan has started to sort of catch fire lately. how do we know that we're just not at the global market peak? i know there are central banks behind us. i get it it's fed-fueled liquidity. but at the same time, people have made so much money the last few years, when dowe dial this back a lint? >> i think what's changed in the last few weeks is that the yield curve has steepened. we're no longer talking about recession with an inversion.
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so when you hear the commentary here in earnings season, it wasn't so bad. so looking forward to next year, we think that the comps begin to look a lot better. and you also for small-cap investing where we spent a lot of time, the high-yield market is confirming at this point that things aren't looking too dire so we're feeling good going into next year, but we have moved very quickly here in the last couple of weeks, so you may want to take some money off the table and -- >> where out of stocks? where are we -- what are we selling? >> those that have really hit good runs. hit your price targets >> but everything's kind of had a good run that's my point. >> is there a particular sector you would fade >> i think technology. we've seen a lot of activity there since this summer. so those areas are getting a little frothy, but we also think they're setting up good for next year those looking to protect a little bit of the gains, this wouldn't be a bad time to pull back a little bit.
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>> one of the names that helped propel the dow today is boeing one of the best performers in the average, the stock has been volatile adds the company continues to grapple with the fallout. but boeing's new chairman, dave calhoun, gave embattled ceo dennis muilenburg a big vote of confidence when he sat down with our own phil lebeau earlier today. >> from the vantage point of our board, dennis has done everything right from the beginning. from the beginning remember, dennis didn't create this problem but from the beginning, he knew that mcas should and could be done better. and he has let a program to re-write mcas, to alleviate all of those conditions, that ultimately beset two unfortunate crews and the families and victims. >> stephen weiss, you've been investing in boeing and buying on the dips. how key is muilenburg as ceo to the investment thesis right now?
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does it matter >> so i think anymore change there would not be good. and despite what -- i had a boss at lehman brothers who used to say, he or she is your person until they're not. up until the day you part company, they're on your team. same thing here. >> but they already made a sacrificial corporate lamb at the head of the commercial airplane business. they booted him. >> that's true that's true. now they're talking about, oh, don't worry, the ceo's not going to get a bonus not going to get a bonus?! >> muilenburg should not be gone now because you need his outreach with the customers, stability with the regulators, it's the worst time to do it so i'm sticking with him for now. and i have been looking for him, actually i had thought that somebody's head should hang high, like his. i've backed off from that. i think he should be there now and see it through >> chris, it's pretty amazing, when you actually look at shares of boeing, they're up year-to-date, despite all of this pain, everything that we've
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seen play out with the commercial business and 737 max, i mean, there's a bull case out there. >> they have the 10 to 15-year order book, morgan and the fact that people believe this plane is going to ultimately refly and this is just a big blip. and i think the political risk is or the risk is, what if it doesn't fly. i have people on a twitter feed who say, i will never set foot on a 737 max what people say and what they do is often different >> let them take a greyhound here's why it's up and why it should be. acious airbus just reported they missed their deliveries zplp all right. stay with us right now we've got to go to kayla tausche who is in d.c. for the very latest on trade, which kayla, as we've been talking about, is one of the big market movers these last couple of days and weeks. >> brian, u.s. and china officials have continued talking about trade at the asean summit in thailand the last few days.
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the focus now is on tariffs. china has always said they want all the tariffs to go waaway, b in lieu of that, at least the recent tariffs i'm told that u.s. officials are open to that if they get enough in return. now the question is, where will this deal get signed, if they get enough in return you heard president trump last week talk about iowa the white house is also considering north carolina, an ip-rich swing state. but i'm told by sources that china wants alaska, an energy-rich state that's easier on jet lag and would be better optics for beijing brian and morgan >> kayla tausche, thank you. jim keenan, how important is trade? all of these trade developments to the broader market narrative right now? is that really what's driving the action >> yeah, i think there are two things that are important. the speed at which trade is changing is important to the aggregate economic data, but just the globalization that you're starting to see is
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important when you go sector by sector and country by country. it has a wide range of impact as many things in these industries have been built over the last 30 years. i think the trade data is important, but it's also probably more important to think about how the different governments are handling that, i would say, almost that unwind or that fight for, i would say, a market share of the global market or global growth >> i was looking through, jim, before we came on set, looking through your emerging market and your credit recommendations right now. you're kind of neutral on u.s. credit, you're kind of negative a little bit on u.s. government bonds. what makes that so attractive to you quguys right now >> just to go back to where you said everything is up. clearly at the aggregate level, there was a pretty big level from the fourth quarter of last year after you saw the markets, both the rates side as well as
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the equities side unwind after some of the fed actions. but when you look at this year, it hasn't been everything up when you look in the internals, there's been pretty wide bifurcation between high-exactly companies and earnings and the lower quality stuff. and when you look at earnings, the higher quality, the double bs are at their ten-year tights. and the weaker credits, they're still doing pretty poorly and have near their kind of long-term ys so what we like right now are things that will do consistently well in a low-growth vur environment. not things that are necessarily tied to the up side. and there are things that we like that are more stable and still do well in a more stabilized environment that had a bit of stress related to earlier this year >> we'll leave it there. thanks for joining us. we have got so much more coming up on the "closing bell." >> still to come, you heard his
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comments on the fed. >> i think they are pretty wise people and they probably have been pausing a little bit, may not be a bad idea either. >> and on wework >> do you feel sorry for adam neumann in all of this >> i'm not -- i'm not going to go there >> announcer: and after thebreathebrea break, jamie dimon gets political. >> america was founded on free enterprise freedom and free enterprise are inrcngbltehaeae. you can't separate them from each other >> wilfredfrost is coming up in 90 seconds g, will it feel like the end of a journey? or the beginning of something even better? when you prepare for retirement with pacific life, you can create a lifelong income... so you have the freedom to keep doing whatever is most meaningful to you. a reliable income that lets you retire, without retiring from life.
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talk to your advisor or consultant for investment risks and information. welcome back to "closing bell." wilfred frost sat down with jpmorgan ceo jamie dimon today and joins us now with part ii of his exclusive interview. wilf >> hey, morgan yes, indeed. so in part ii, i started by asking jamie dimon about that change that the business roundtable made to their overall statement back in august where they dropped the primacy of shareholder first and instead shareholders became now one of five different stakeholders, alongside customers, workers, suppliers, and communities and i asked jamie dimon why make the change now >> a reporter actually pointed out that your statement from 1997 is still primary
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shareholder value. all you care about is profits and shareholder. and we went and read it and the board read it and we all said, this doesn't represent at all how we run a company i mean, first and foremost we talk about customers. we better do a good job or we lose we better take care of our employees or we lose and we all want to be great community citizens so it was an evolution to recognize reality. think of it like a team. it's very simple to say, show the value and you want a simple answer, but you can't win if you don't have a running back and a receiver the team wins. and you have to do each well to be successful. and that's what it acknowledges. it's still, show the value but it's much more long-term you don't have to do earnings guidance, which most of you was think is a complex, unnecessary thing to do, which causes some short-term pressure. and you can put your best foot forward. what do we for consumers, employees, communities one last thing about communities, lifting up a community, it's probably a little bit more removed than the
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rest of it but if you go around the world and you have healthy economies, which are based on good policy, you have healthy businesses and much healthier citizens. >> and if you go to other economies that aren't growing at all, nothing's wrong with people saying, i'm going to use some of my skills and talents to lift up south society. and that would be better for everybody including your business >> senator warren embraced the brt statement and she went further and she wrote a letter to you saying that she expected you to endorse and wholeheartedly support the reforms laid out in her act to meet the endorsements. >> i think that's sloppy logic that i think that's right because we changed our statements and i think that people have the right to look at companies and say, what are you doing for your customers and your employees are you helping out the community and stuff like that. and there's a lot of stuff that i may not go through now but to me, that we should do but changing the complete nature of how you run a corporation
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absolutely not >> you've detail with senator warren plenty of times do you think the characterization of her in the press that she's anti-business, anti-capitalism is fair? >> look, i don't know. you really have to ask her what she really means she uses some pretty harsh words. i don't like vilifying anybody i think we should applaud successful people. a lot of people come to this country for opportunity and choice and success we want that for everybody that's a little bit different than paying your fair share and howthe taxation system should work that i completely understand but i think we should look that america was founded on free enterprise they're interchangeable. you can't separate them from each other successful companies have lifted up society it doesn't mean they can't do more or didn't make mistakes so i think we should applaud that and if people are very specific things that we should do different, we should think about doing them different
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>> if the vilification part was we removed, any of the general aspects that she talks about that you agree with in terms of wealthy people paying more i heard you speak recently at an event with tim adams and james gorman you talked about having a negative income tax. >> yeah. i think it's important that peec people recognize the things that haven't worked in society. infrastructure doesn't work. it's very -- you know, i think 15% of america makes $10 an hour or less, which is clearly not a living wage. i think it's in all of our interests to have proper safety nets, fix those problems and send people to work. and i would be in favor of a negative income tax to get people to work we have one kind of in the earned income tax credit which is supported by republicans and democrats. but limited mostly to single women with children. i think it should be expanded. jobs create dignity. so i think acknowledging people with problems and fixing it doesn't mean their policy is always right the road to hell is paved with good intentions when it comes to policy skpus and you should be very careful about what you're trying to
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accomplish there are a lot of examples around the world about policies that work and policies that didn't work. a lot of wealthier people i know wouldn't mind paying more taxes, but it's very important for my democratic friends to also look at the following they should justify how they spend money. every department in washington, every one, should say, i took your money, mr. and mrs. citizen, and here's what i did with it. not how much into took. and put a little pressure on yourself before you just ask for more i don't think even democrats believe that throwing tons of money at washington, d.c. is going to make the country that much better off. i think people are very cautious about feeding the beast too much and for good reason. a lot of government programs have been abysmal failures and we should acknowledge them both problems need to be fixed. those solutions didn't work. let's try something different. >> if the race was warren versus trump, do you think for the first time there would be a genuine opportunity for an independent candidate? >> i don't think so.
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i mean, there may be an opportunity one day for an independent party, but i don't think. people that know much more about policy have studied that and have come up with the answer, no >> to bring it all together, jamie, you said that when your new headquarters is finished that you wouldn't be moving back in at that point if the building works on time, you've got three or three or four years left in your position >> well, i always say five >> well, you said five a years ago. it's definitely not -- i'm always going to say five wherever you ask me, i'm going to say five. that's up to the board and hopefully we'll have a great transition >> but what -- however many years it is, you're clearly incredibly passionate about your country. >> yeah. >> and very involved and thoughtful about the policies that can make the country stronger so after banking, is some form of public service an option for you? >> probably not. but i would never rule anything out. and never say never, but i do -- i think that business, you think
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hospitals, schools, not for profits, working for government can fix our problems yelling at each other is not going to fix our problems. collaboration wox arks and you go to certain cities across the world. that works like, how do we get kids' jobs at the inner city schools. that's probably going to take business and community leaders and teachers to agree we need this kind of training can you help us train the trainers >> so i want to fix those problems i think we've really held america back i've mentioned many times we've grown 10%. it should have been 40%. if you had another 20% growth, that would have been another $3 trillion of gdp, another $1.5 trillion in the pockets of our citizens that would have succeed up $1 trillion or more of capital. instead of buying back stock, maybe they would have needed that capital to invest in their businesses wages would have gown even more. inflation would be higher. it would be more normal. i think we did this new -- you
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know, this secular stagnation, this new normal, i think we did it to ourselves through bad policy, infrastructure, certain taxation, inner city schools, too much regulation, you know, a capricious and slow litigation health care which costs too much i think those are the things that are holding us back and we should share the more privileged in this nation with the less privileged. >> probably not, but i would never rule anything out, his answer there as to whether a public service role could follow his time in finance, followed by another minute of policy so make of that what you will. either way, he's clearly not going anywhere soon. whether it's five years or three years, clear that he's staying at the helm of jpmorgan for a little while longer, at least yet. guys, back to you. >> wifflered, it's nice to hear a ceo what pretty much everybody else out there knows, he talked about capricious litigation. he threw that in at the end.
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we know, our legal system here, the hundreds of thousands or millions of lawsuits a year jack up the price of all of our consumer services, all of our products, all of our insurance it's kind of rare to hear a ceo even mention that, because it's something that's like, they don't dare to tread. that's what i like about jamie dimon. he just comes out and says pretty much what everybody else seems to be thinking >> well, absolutely. he's always someone that does that on all sorts of topics, as we heard in another part of the interview. i think more broadly, a theme that came out in those six or seven minutes is one that we've heard, whether it was with leon cooperman, with ray dahlia or many others on our air over the course of the last couple of weeks where some of the wealthy do feel vilified it's more than just a sense that politicians are saying taxes need to go up for the wealthy. that the criticism has gone further and jamie dimon there also outlining that he was willing to pay more tax. in fact, he expected it and has
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mentioned the increase for negative income tax and something that he would believe in but at the moment, there's just this depressingly wide gap between the two sides. even if there's a lot that they could agree on >> well, the gap is very clear, right? based on your part it's either, make wealthier people poor through increased taxati taxation, wealth tax, whatever it is, or hopefully try to bring people -- jamie was talking at the beginning about bringing people a paycheck, making them feel good about themselves by get a raise or bringing that -- we all remember that first paycheck that we got, wherever it was and you feel pretty good about it i think you're right, the chasm is pretty wide and by the way, i'm wearing your tie. >> that's fine, there's plenty up there but i think it's actually more complicated than just simply democrat versus republican on this and that was highlighted in the debate between senator warren and leon cooperman recently on our air. because leon cooperman came on and very clearly articulated his
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point of view and senator warren follows up on twitter and on social media, almost ignoring all of the points that were just made and doubling down on the broad generation criticism of wanting people to pay more, which may well have been a theme that mr. cooperman had echoed himself it was a theme that today jamie dimon echoed and we will wait to see if there is, indeed, a response, and what it is. clearly, things -- we're in an election campaign and social media changes the nature of those campaigns. so perhaps it is to be expected. but nonetheless, it continues. >> we've got to leave it there, but important to remember that almost the same amount of people consider themselves independents as they do republicans and democrats combined they just get the opposite great stuff, wilf. i will take care of your cravat, my friend. thank you. >> thanks, i wonder which one it is, no doubt >> it's blue and white one of the 16 blue and whites. i didn't want to use the union jack up next, juul under fire and
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this is big. a new report surfacing claiming juul disregarded earlier t w gti thaitasetng teens hooked on its product. do you have concerns about mild memory loss related to aging? prevagen is the number one pharmacist-recommended memory support brand. you can find it in the vitamin aisle in stores everywhere. prevagen. healthier brain. better life. ♪
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welcome back we're watching two stocks
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plunging after hours on earnings weight watchers and match. eric chemi has the numbers for both >> that's right. let's start with weight watchers international, the parent company now ww international shares of the wellness company down more than 15% after missing wall street forecasts on revenue. the guidance also coming in a touch light. the implied fourth quarter outlook mostly below estimates at 26 to 38 cents a share. the street was looking for 36 cents. subscriber count also fell to 4.4 million people that's down from 4.6 million last quarter that's why the stock is down investors swiping left on tinder parent match revenue in line with estimates interestingly, the company's cfo saying sales are being crimped by several macro economic issues, including brexit, and that the company incurred unexpected losses last quarter and iec down sharply in the after-hours, as well
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>> all right, eric, thank you very much on that. still ahead here on "closing bell," trading with unlimited borrowed money it turns out that's what some robin hood user have said doing. if it doesn't sound good, it's not. 'vgothsty,omg wee t e or cinup when you rent from national... it's kind of like playing your own version of best ball. because here, you can choose any car in the aisle, even if it's a better car class than the one you reserved. so no matter what, you're guaranteed to have a perfect drive. [laughter] (vo) go national. go like a pro. see what i did there? so servicenow put your workflows, huh? your employees must love you. thank you. ah, you could say that. so how are things with you guys? great. thank you. thank you, sir. lunch next week? terrific. say hi to the team.
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so your growing life can be more rewarding, too. ♪ what would you like the power to do? ♪ it's time now for a cnbc news update with sue herrera >> hello, morgan hello, everyone. here's what's happening at this hour senator mitt romney agrees with president trump's call for a crackdown on mexican drug
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cartels. this after nine americans were brutally massacred in an apparent highway ambush in northern mexico. >> and hour to dole with it. this is something that mexico has been working on for a long, long time. and there's still a problem and something's getting worse. and the president has said, let's get serious about it and has indicated that he'd be willing to help and i think that's the right sentiment >> the head of the united nations is urging all parties to abide the 2015 iran nuclear deal this in the wake of news that iran will start injecting uranium gas into their centrifuges. a spokesman for antonio guterres says that the deal has contributed to international and regional peace and security. and the baltimoloaltimore c council has given prelim mare approval to banning plastic bags in addition, the city would charge a 5 cent fee when stores and restaurants give customers any other kind of bag. the retailer would keep a portion of the fee and the rest would be sent to the city's treasury you are up to date that's the new update this hour.
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brian, back to you >> all right, sue, thank you very much. well, the juul vaping scandal taking another bad turn today. a new report suggests that juul reportedly disregarded earlier evidence that it was getting teens hooked on its product. frank collin back at englewood cliff with more. >> they designedit to be addictive and debated whether or not to curb early sales to teen. that report determined that juul did not buy early cigarettes because they didn't provide enough nicotine or they simply didn't like the taste. this comes as a separate report finds that middle school vaping more than doubled over the past year and high school vaping has increased 7% to a total of more than 4.1 million high schoolers. of students that only vape and don't use cigarettes, three out of four use flavors with mint and mango being the preferred choice back over to you >> all right frank. frank, thank you very much important story there. meantime, a rough day and a rough couple of months
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maybe a year for unicorn stocks. those are the $1 billion private valuation, or more peloton reporting results that are initially popping, that the stock finished the day down by more than 7% meantime, uber went public at 45 now sitting at $28 per share and was down again today that is a new all-time low peloton and uber are not alone in their troubles. remember smiledirect what about lyft? how about slack? they're all off to rocky starts. and deep underwater for investors who bought the open on the first day, not to mention wework's failure to launch for more, let's bring in oswatth, he is known as the so-called dean of valuations s a oswath, it's a simple question, either they were wildly overvalued in the private markets or wildly overvalued in the public markets which is it? >> i would replace the word
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"valued" with "priced. the private market was building to a public market to one that is different than the market these stocks actually came into. you look at the start of the year, many of these stocks have had a much better reception. during the course of the year, the mood and momentum has shifted in the market partly because these private companies have been a bit arrogant about the way they've approached public markets, which is with a take it or leave it attitude with corporate governance and how these companies are structured i think that's catching up with them >> professor, when you hear, just today alone, the last 24 hours alone, when you hear uber laying out a path to profitability by the end of 2021 you have real real make comments about profitability, peloton stressing the move towards profitability. do you think that the lesson has been learned there and that these companies that are now public are beginning to change the priorities and change the way they're communicating with investors? >> for the moment, the lesson might have been learned, but
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it's never permanent as long as vcs reward scaling up a lot more than building good business models, you're still going to see young companies enter the market with bad business models, which is what these companies have so i think it would be good to say that this is a permanent shift. but for the moment, the markets taught them a lesson and hopefully it will stick. >> so professor, we've spoken to you about uber in the past the stock closing around $28 a share today. it ipo e'd at $45. is there value to be here? >> i bought uber about two weeks ago. and i think at $28, there is potential, enough upside for me to buy the stock i think a lot of selling today was not about the earnings report it's an advance of the lockup ending tomorrow. so it will be interesting to see what happens when those additional shares hit the market i don't think there's going to be the kind of reaction you saw in beyond meat, but i think that's what's scaring investors today. but that's going to relieve -- that fear is going to get
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relieved in a couple of days let's see what happens >> thanks for joining us today >> thank you still ahead, quote, infinite leverage some robin hood users have been trading withnlit uimed borrowed money. we've got the details, next. ♪ ♪ doprevagen is the number oneild mempharmacist-recommendeding? memory support brand. you can find it in the vitamin aisle in stores everywhere. prevagen. healthier brain. better life.
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this is a pretty incredible story. some robin hood users are discovering a glitch that allowed them to trade with unlimited borrowed money, calling it maybe the infinite leverage trade kate rooney joining us now with more on this story what happened and how did it happen >> that's right. hey, brian some tricky robin hood users were able to get extra leverage on the trading app they did this through margin trading, which is perfectly common, very legal a lot of brokerage firms do that users are able to put down a small percentage of the trade and the brokerage firm acts as a lender but the glitch is that users overstated the amount of money they had in their cats to borrow and were able to sort of cheat s the system you can consider this similar to a video game hack where users
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are helping each other out and outlining a step-by-step process so other people could repeat this they were calling it infinite leverage or the infinite money cheat code one trader was claiming on reddit he took a $1 million position with only $4,000 worth of deposits. another claim he got 25 times leverage and $50,000 worth of buying power to buy some stock so robin hood acknowledging the glitch and this happened a spokesperson telling cnbc they're aware of the situation and communicating directly with customers. >> kate, i wish you could see brian's face when you just spouted off those numbers. one of the key questions here for me, though is -- >> why, what was wrong with my face >> who is held responsible who is held responsible? these traders or the company when you have a glitch like this >> exactly well, so, on the company side, this is probably a software issue. and there's some engineer at robin hood that will probably need to go to his bosses and
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figure out what happened so it's really an issue when sort of software eats the world and you have these code engineers interacting with these software apps. so on the customer side, they might have to deal with the s.e.c. on this case. it could be a case where this is not technically legal and it will really come down to the terms and services that these people agreed to with robin hood >> we've got to go, but may face looked away, it was like the jaw dropping it's like those people that you read about, that there's like $1 million accidentally put in their bank account and they spend it it's like just because you have the unlimited leverage doesn't mean that you can or should use it >> and i talked to a vc that was saying that if this happened with charles schwab, you probably wouldn't hear about it, because the users aren't talkin. but the fact that these robin hood traders ron social networks and talking to each other, came up pretty quickly and other people were able to replicate. and i really think of video game hacking in this scenario
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>> all right kate rooney, thanks for bringing us the latest on this. to read her full story, log onnow to up next, record rallies with a catch. stock hitting an all-time high today, but billionaire ray dioal is still raising the red flag on the economy. we'll discuss that, next
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it also has the highest growth in manufacturing jobs in the us. it's a competition for the talent. employees need more than just a paycheck. you definitely want to take advantage of all the benefits you can get. 2/3 of employees said that the workplace is an important source for personal savings and protection solutions. the workplace should be a source of financial security. keeping your people happy is what keeps your people. that's financial wellness. put your employees on a path to financial wellness with prudential. the dow and nasdaq setting another all-time high today, but
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the bears are still sounding the alarms >> investors are very flush with money, and as a result, they're taking very low returns and they also are buying dreams rather than earnings and stocks so we've push that to an extreme in terms of those returns. and then at the same time, it is clogged with investors so investors have an abundance of money, and we also don't have much in the way of the trickling down so we do know that we have populism of the left and populism of the right. and we're going to come into a period of time where that's going to be more challenging and it will have big effects on the markets. >> we should say dalio has been warning about risks in the rally since at least the middle of last year. joining us now from the charles schwab impact conference is liz ann sornaunders, chief investme strategist at charles schwab liz ann, always great to have you on thanks for joining us today.
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>> my pleasure >> do you agree with ray dalio's assessment of the economy and the state of the market right now? >> well, i will say, we've done a lot of work on periods where you get a lot of asset inflation when you're not seeing it as much in the real economy, as measured by things like assets held by households as a share of disposable personal income, which are at a record high and they do tend to -- those eras tend to correspond with eras of most metrics tend to be lower, productivity, even job growth so i would agree with that part of it. >> we saw another rate cut from the fed last week. do you think that's it are we done? >> yeah, i'm >> i think we have some technical issues with liz ann. >> we'll try to get her back i think the one thing that liz has done very well and pointed out is this bifurcation in the economy, and when we get her back, we'll try to patch it in
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but what she's talked about is that -- and steven weiss addressed this earlier, there's so much data out there now where you could pick, do you want to have a bullish view or a bearish view on one hand, you've got consumer confidence at near highs you have ceo confidence falling off a rock small business hiring, as liz ann will point out, looks like it's starting to trough. but yet, manufacturing looks like it's turning down it's this weird economic time where you could choose whatever data point you want, and make a fairly strong argument that you're right >> yeah. and of course, we've heard a lot of comparisons, too, for example, 2015, 2016. we saw an industrial recession in this country, because, again, that was the last time we saw a contraction in manufacturing data and you saw some of this weakness in the manufacturing and industrial part of the economy. so a lot of debating on whether we've basically been seeing a repeat of that or not. >> okay. we'll rye to get liz ann back. liz ann, if you can hear us, we're coming for you don't go anywhere. sit tight. >> i can hear you, i can hear you.
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>> you can hear -- we just can't see her. all right! >> all right -- >> there she is! >> liz ann, how are you? have you been. >> i'm good. >> so we were just talking about this bifurcation in the economy. want to get your thoughts on it. >> i missed the question we're having technical difficulties >> we were waxing poetic about all your great tweets and your sort of theory now that there's this bifurcation in the economy, and particularly the data. consumer confidence up, ceo confidence down. manufacturing down, small business hiring looks like it's finally starting to trough you could cherry pick the data points and make a pretty strong argument either way right now. >> the one thing, though, i heard your comment about comparing the manufacturing recession to what we went through in 2015 and 2016 a couple of important differences. that was largely due to the energy sector. it had much more of a confrontation. this is broader as it relates to trade and across the spectrum of manufacturing subcomponents and
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industries for now, the services side is hanging in there and then of course, you're witnessing it in a business environment. i spoke yesterday up on the main stage here and showed a chart that looked at at the most recee survey i think in the first time in history the number one answer for both what's the biggest upside risk to the economy and what's the biggest downside risk was the same answer. trade. and that's the environment we're in we sought initially the trade uncertainty was felt in the soft data, the survey based data and confidence data but it's morphed now into actual activity that's why i think we have to be careful about saying as long as the consumer stays afloat. because if we start to see it morph through say the employment channels that's when you see a risk of not just a mfgt recession but a broader recession. as the friday's job's report so far so good. we're not seeing it backup
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but but that's what i'd pay attention to it. >> martin scorsese setting the record straight, clafrpg comments he made about havl and other superhero type movies. basically slammedpeople. now is he walking back the comments we'll find out and discuss stick around just wasting time. wasted time is wasted opportunity. >>exactly. that's why td ameritrade designed a first-of-its-kind, personalized education center. see, you just >>oh, this is easy. yeah, and that's >>oh, just what i need. courses on options trading, webcasts, tutorials. yeah. their award-winning content is tailored to fit your investing goals and interests. and it learns with you, so as you become smarter, so do its recommendations. >>so it's like my streaming service. well exactly. well except now, you're binge learning. >>oh, i like that. thank you, i just came up with that. >>you're funny. learn fast with the td ameritrade education center.
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martin scorsese is doubling down on marvel movie criticism writing an op-ed that argues that superhero movies favor audience tested action at the expense of artistic vision and risk to aspiring film makers he warns the situation of the moment is brutal and inhospitable to art in of course follows scorsese's interview last month where he said that marvel movies were not cinema and the op-ed comes after bob iger bit back earlier this week saying i don't think he has seen a marvel film anyone who has seen a marvel film couldn't make the statement. other media giants weighed in including here on cnbc >> these two guys are my heroes and earned the right to express their opinions and i wouldn't be doing what i'm
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doing if they didn't, you know, carve the way. >> i think cinema is more unhealthy. i'm kind of with scorsese about what's happening in the cinema dominated by a certain kind of movie. >> i don't think he is wrong i mean there is a certain methodology to some of the movies and they're great some are really great. certain methodology to some of the movies you spent a lot of money. big names, big names get people in theaters which might explain why storiesy has the irishman through the hit netflix. >> i don't mind the superhero. i don't like the remakes. >> a lot of the same franchise. >> you run out of ideas. there is a lot of ideas. they should a movie on the behind the scenes production staff of "closing bell." >> all right the control room that's what we'll call it. >> yeah. out of control room. >> up next, key earnings, coming from soviet bank and roku we'll
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by the way, she's the it wasnext mozart.g day. as usual we were behind schedule. but sophie's enthusiasm cannot be dampened. not even by a run-away donut. we powered through it in our toyota prius. because a star's got to shine, no matter what. it's unbelievable what you can do in the prius. toyota let's go places. it is now time for our wall street look ahead. julia boorstin looking at roku and dedra bosa is looking at
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softbank. >> morgan a critical quarter for softbank right down front and center and likely to impact group earnings the past quarter bailed out wework continuing to follow a public company. hitting new lows tomorrow it faces the lock up expiration, a chance for insiders to sell so we could see continued selling pressure questions are swirling around other unicorn bets like wag and didi, the chinese hide hailing giants masasan does typically give a broad update this is key because softbank is trying to raise funds for a second vision fund back to you. >> dedra, thank you very much. let's get a preview of roku. jumia has that. >> roku expected to continue to benefit from the streaming wars. the company's revenue in the third quarter is projected to grow by 48% while losses
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expected to widen to 28 cents from a 9 cent loss earlier in the quarter. as the company invests in growing the employ base and facilities now, roku shares are likely to be volatile depending on how knows numbers come out, because remember the stock rallied 358% since the start of the year. but still down 21% from september. back to you. >> one to watch closely. that does it for "closing bell." >> "fast money" starts now >> live from the market sited overlooking new york city times square this is "fast money." i'm melissa lee. traders pete narjen. karen finerman and steve grasso. walgreen's in talks toth private. could these be other dow shake ups in the works if walgreen's gets the boost lafts in space analyst how do you value the space tourism company when nis


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